Tech Mahindra: Tech Mahindra Q1 profit up 23% to Rs 851 crore, revenue down

Tech Mahindra, the country’s fifth largest IT services firm, posted a 23% year-on-year increase in first-quarter net profit, driven by healthy margins and segmental growth.Net profit for the quarter ended June 30 rose to Rs 851.5 crore from Rs 692.5 crore a year earlier. Sequentially, profit grew 28.8% from Rs 661 crore in the three months ended March 31. The Pune-headquartered firm’s consolidated revenue from operations declined 1.2% on year to Rs 13,005.5 crore. Sequentially, revenue increased 1%.

TechM’s operating margin expanded to 8.5% from 7.4% in the previous quarter and 6.8% a year earlier. “For TechM, we are more stable and more settled to a new organisation structure. That allows us to take better opportunities (from the market). Market is more or less the same, maybe it has improved from a year ago,” managing director and chief executive Mohit Joshi said. Three business segments – manufacturing (6.4%), retail, transport & logistics (4.9%) and healthcare & life sciences (6.1%) – posted growth. But in its largest vertical, communications, revenue fell 9.9% on year and 1.9% sequentially. Also, the segment’s market share declined to 33.1% from 34% the previous quarter. In the Banking, financial services & insurance vertical, revenue fell 1.2% year-on-year but was marginally up at 0.7% from the previous quarter.

BFSI is not only seeing some new opportunities in existing accounts but also has won new clients, Joshi said.

In dollar terms, TechM’s revenue grew 2.6% YoY and 0.7% QoQ to $1.56 billion. In constant currency terms, revenue declined 1.2% YoY and increased 0.7% from the fourth quarter of last fiscal year.

Total deal wins during Q1 grew with a total contract value of $534 million compared with $500 million in the previous quarter.